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Starbucks Teaching Note

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Starbucks Coffee Company Teaching Note
Overview
The Starbucks Coffee Company case offers students an opportunity to explore the tradeoffs between a successful business strategy (in this case, its focus on the purchase of the highest quality coffee, which is at the heart of this business) and the company’s interest in maintaining and enhancing its reputation as a socially responsible company. The case focuses on the CEO, Orin Smith and his decision whether to purchase and offer fair trade coffee after being pressured by the Global Exchange, an NGO responsible in the 1990s for Nike’s difficulties in relation to unfair labor practices in developing nations.

Questions to Begin the Case Discussion
Students can approach this complicated case from many different angles, so questions should be tailored to the individual needs of the course you are teaching. Possible successful approaches include the following: 1. Focus on the factors in the environment affecting Starbuck’s decision. This allows you to explore comparison between Nike in the 1990s and Starbucks today. The company faces the risk of overexposure because of its incredible rate of growth. And, like WalMart, the company has been seen as a destroyer of smaller main street type businesses. It also represents American culture in distant lands in the same way that McDonalds did in the 1970s and 1980s. Its interest in presenting itself as a socially responsible company also makes it an easy target for antagonists like the Global Exchange. 2. Focus on Starbuck’s image and identity specifically. How will this decision affect Starbuck’s reputation? Students will be able to see quickly that the company’s focus on quality may suffer if it chooses to sell fair trade coffee unless it is able to maintain a consistent level of quality. This can get into discussions of what drives the Starbucks brand and how much a part of

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